I wrote last week about some comments made by Ben Inker, the head of asset allocation at GMO, in a recent interview. In another section of the interview, he spoke about how bad things could get in a price crash. He referred to losses of “30 or 40 or 50 percent.”
Get The Full Series in PDF
Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.
Q4 2020 hedge fund letters, conferences and more
Losses From Price Drops
Those sorts of losses would be very bad. I get it. But I can’t help but note that, in a worst-case-but-not-entirely-unreasonable scenario, the losses experienced could be a lot worse than that. Today’s CAPE level is 36. The mean CAPE level is 16. Just a return to the average price level would require a price drop of more than 50 percent.
It is 20 years since Chase Coleman launched his hedge fund, Tiger Global, with a seed investment from legendary hedge fund manager Julian Robertson. During this time, the firm has carved out a reputation for being one of the most successful hedge funds of all time. Q4 2020 hedge fund letters, conferences and more Its
